PM MUDRA Yojana: The Pradhan Mantri Mudra Loan Yojana (PMMY) is a key initiative by the Government of India. It was introduced to support small business owners, shopkeepers, and individuals looking to start small enterprises in the country. This scheme was rolled out by the central government in April 2015. The Ministry of Micro, Small and Medium Enterprises oversees the Mudra Loan Scheme, which offers loans up to ₹20 lakh without requiring any guarantee.
This initiative is tailored for small entrepreneurs, shopkeepers, street vendors, artisans, and anyone thinking about launching a startup. The best part? You don’t need to put up any collateral to secure this loan. That means you can access funds without any backing.
What is the Mudra Scheme?
The Mudra Loan is a type of business loan provided under the Pradhan Mantri Mudra Yojana (PMMUDRA). Initially, the scheme offered loans of up to Rs 10 lakh, but following the 2024-25 budget announcement, this limit was increased to Rs 20 lakh. The Pradhan Mantri Mudra Yojana (PMMUDRA) is categorized into four main segments: Shishu, Kishor, Tarun, and Tarun Plus. The Shishu Loan is aimed at those looking to kickstart a new business or needing a small amount of capital. A significant advantage is that for loans up to Rs 50,000, no security or guarantee is required by the bank.
How much loan is available in which category?
Under the Shishu category, you can get a loan of Rs 50,000; the Kishor category offers loans ranging from Rs 50,000 to Rs 5 lakh; the Tarun category provides loans from Rs 5 lakh to Rs 10 lakh; and the Tarun Plus category gives loans from Rs 10 lakh to Rs 20 lakh.
For what purposes is the loan available?
Loans under the Mudra scheme can be used for various business types, including:
Manufacturing Unit
Food Processing Business
Small shopkeepers (Retail)
Transport and Logistics
Service sector
How to get a loan without guarantee?
The most significant feature of Mudra loans is their accessibility. The government’s goal is to promote self-employment, so the process has been kept simple. For loans up to Rs 50,000, you don’t need to pledge your land, gold, or any valuables. Compared to other commercial loans, the documentation is minimal. Banks generally don’t charge any processing fees for Shishu loans.
How to apply?
To avail Mudra Loan, you need your Aadhar Card, PAN Card, Bank Account Details, Passport Size Photograph. If you are running any business then you will have to provide proof of the same. Sometimes the bank may also ask you for your business plan. To apply for this scheme, first go to the website Udyamimitra.in. Then choose the option of Apply for Mudra Loan. After this a form will appear in front of you, fill in your personal details as well as the loan amount in that form. Then upload the requested documents and submit the form. If you wish, you can also apply for it offline.
Interest rate and repayment period
Mudra loan interest rates vary from bank to bank, but they generally range from 9% to 12%. You can repay this loan within five years, reducing the burden of monthly installments (EMIs) for new entrepreneurs. Many banks now offer e-Mudra, allowing you to apply online from the comfort of your home. Once the e-KYC process is completed using your Aadhaar-linked mobile number, the loan amount is credited directly to your account.
